Bitcoin Sportsbooks

by Dev Ops

November 4, 2013

Unless you have been living under a rock, you have no doubt heard of the crypto-currency, Bitcoin. Bitcoin is a unique option compared to traditional fiat-based currencies in that it operates with no central bank or regulatory authority and is not vulnerable to government seizures. It also offers users the choice to be anonymous if they choose and is a cost effective way to transfer money from anywhere in the world quickly.

The convenience and nature of the Bitcoin protocol is one of the main reasons that it is has been adopted for online gambling services, including online casinos, poker rooms and online sportsbooks. Many bitcoin gambling sites are now multi-million dollar companies which are continuing to grow.

Bitcoin sports betting markets have grown significantly since the bitcoin explosion started just several years ago. As the popularity of bitcoin continues to rise to the general public, more and more people will begin to head to bitcoin gambling sites. Sports betting has been around since the Bronze Age and has shown no signs of slowing down. In fact, since the advent of the internet, it has grown at a record pace.

Bitcoin sportsbooks are starting to explode across the gambling landscape and in a few years could change the way that people bet sports online. There are a number of distinct advantages that bitcoin sportsbooks have over their fiat currency based competitors.

Immune from Seizure

This may not matter to our friends in regulated markets, like most of Europe, but for grey-area or expressly outlawed markets, this is an decisive factor. I have lost count on the number of times an online sportsbook folds or goes down thanks to US government action. Account funds are seized or frozen and indictments are handed down, and the sportsbook’s owners are arrested. Players lose their bankrolls, and they have little to no recourse to get them back.

With bitcoin, this is nearly impossible. There is no central authority or government that can freeze a bitcoin address like they would be able using a traditional monetary system. This leaves bettors much safer from overzealous governments who are looking to take down online gambling sites.

Also, bitcoin has not officially been declared a currency by most world governments, including the United States. At this point in time, it’s likely not on their radar screen in terms of a crackdown. Of course, this could change as it rises in price and popularity, but for now, bitcoin sports betting is not likely a priority of law enforcement, even in extremely anti-sports betting nations.

The same cannot be said for traditional sportsbooks based in fiat currencies such as the US Dollar. There are news stories everyday about sites being targeted and taken down by the federal government.

Operating Cost

Sportsbooks and gambling sites that deal in the US Dollar, Great Britain Pound and Euro all face large payment processing costs associated with their products. In most cases, payment processing is the largest cost a gambling site will incur. Its costs are even more money than hiring staff and management and is easily millions per year and tens of millions for some of the world’s largest gambling sites.

With bitcoin, this cost is nonexistent. Almost all bitcoin transactions are free of charge, and if there is a fee, it is just a few cents. Sites also won’t have to worry about segregating player funds, because each individual bettor will have their own account and own bitcoin address. This allows bitcoin sportsbooks to put more money back into their product and offer more lucrative odds because they are saving tons of money on payment processing.

Also, from a player’s perspective, your funds are only a few hours away, at most. Even in regulated markets, bettors may have to wait several days for a site to process an e-wallet withdrawal and it’s even worse in non-regulated markets.

For instance, US bettors will often have to pay fees to deposit money and to withdraw. This isn’t cheap and will cost players somewhere between $30 to $50 per check and even more for faster forms of withdrawal, such as Western Union or MoneyGram. These can be processed within 48 hours but can cost players $50 to $200 depending on the amount requested. Check withdrawals will normally take several weeks to process.

Bitcoin withdrawals take just a few hours from the top bitcoin sportsbooks, and there is never a fee charged to players for processing cash outs. Beating the sportsbooks is hard enough, and paying extra fees to deposit and withdraw your sports betting funds makes it even harder to win against the oddsmakers. With bitcoin, this sometimes hidden edge is not a factor.

Anonymity and Freedom

Bitcoin sportsbooks and bitcoin gambling sites in general will very rarely ask players for their real names or any forms of identification. This is in contrast to traditional sportsbooks which will ask for your name, address, phone number and even bank or utility statements before processing withdrawals.

With bitcoins, you are provided ultimate anonymity and what you do with your hard earned coins is entirely up to you. There are no documents that need to be verified or hoops to jump through before you can withdraw. The whole process is 10x easier than withdrawing via a fiat based sportsbook.

Increasing Number of Markets

Perhaps the one area where bitcoin sportsbooks may be lacking is the variety of markets that they offer. However, this is beginning to change. Bitcoin sportsbooks now offer deposit bonuses and reloads, along with a long list of markets including live betting and sports betting exchanges similar to Matchbook or BetFair.

As more and more bettors figure out that bitcoin is the best option for online gamblers, you can bet that bitcoin based sportsbooks will start to increase their betting markets, options and bonuses. Bitcoin sports betting has just begun to make a dent in online sports betting markets, and I am excited to see what the future holds. I am not fully informed or qualified to discuss this area in any more detail and I suggest you look at a dedicated website such as BitcoinSportsbooks.com for more in depth coverage.

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